It's that time of year again: Seniors are hearing back from college admissions offices. There will be delight, and there will be sadness. And then there's the issue of how to pay.
The cost of postsecondary education is enormous, and a financial strain on most families. But applying for aid need not be as painful as it seems.
Apply for loans
The first thing any soon-to-be-matriculated student must do is file the FAFSA (Free Application For Federal Student Aid), which is the entry point for all government loans. It's best to fill it out early, too.
Stephen O'Meara, deputy director of student financial assistance at the City University of New York, said everyone should fill out the FAFSA, even if you think you don't qualify.
The rates for borrowing loans from the government are often lower than taking out any other type of loan, he said.
Experts advise against taking out private loans, too. The terms are often confusing, repayment can begin before a student has graduated and interest rates are often not fixed, meaning they can fluctuate.
"Alternative loans are a last resort option," O'Meara said.
Draft a budget
While borrowing money may be necessary, you must assess your financial situation first.
"If your total debt is less than your annual income, you should be able to pay it back in 10 years," said Mark Kantrowitz, publisher of the financial aid information sites FinAid.org and FastWeb.com. "Otherwise you'll struggle."
Consider how much money you'll need for college, but also how much you'll be making after you graduate, O'Meara said.
"Everyone's excited to live alone, to live in a dorm. The budgeting piece is far from your mind," he said.
Indeed, student debt is on the rise. Between 2004 and 2012 it nearly tripled, according to a report issued last week by the Federal Reserve Bank of New York. More people are taking out loans, and taking longer to pay them back. In 2012, 44% of borrowers were not yet repaying their loans due to deferments and forbearances. Delinquency rates were up too: 17% of borrowers in 2012 were more than 90 days late on a payment, a steep increase from 10% in 2004.
Being late on loan payments also makes it more difficult to get approved for a loan later, too.
Delinquency "is the kiss of death," said Andrew Haughwout, vice president and economist at the New York Fed.
Student Loans 101
-- Federal Student Aid: Fill out the Free Application for Federal Student Aid (FAFSA) to apply for federal and state financial assistance, from Pell grants, which do not need to be repaid, to work study benefits to subsidized and unsubsidized Stafford loans.
-- Private Education Loans: Also called alternative loans, these loans often cost more to pay back than government loans, due to variable interest rates and other factors, but can be very helpful if additional financial assistance is needed.
-- Scholarships: Undergraduate scholarships and graduate fellowships do not have to be repaid. According to Mark Kantrowitz of FinAid.com, hundreds of thousands of scholarships and fellowships from several thousand sponsors are awarded each year.
From Mark Kantrowitz, financial aid expert and publisher of FinAid.org and FastWeb.com
1. Complete the FAFSA every year, even if you weren't awarded anything the year before. Many factors are considered when applying for federal aid, including the amount of children in a household that are enrolled in college.
2. Calculate a precise budget for yourself. Include all monthly expenses from tuition to textbooks to transportation. You will have a better idea of how much you need to borrow.
3. Always read the fine print before you sign any loan documents. The acronyms and terminology can seem like a foreign language.
4. Start saving for college early. Every dollar you borrow will cost you twice as much when you pay it back.
5. Consider the future. What degree are you pursuing? A liberal arts degree will not yield the same salary as a law degree. Be realistic about how much you can borrow.
6. Privately held loans are attractive if you have exhausted all other options and need more funds to pay for college, but if it has come to that, you're probably over borrowing. You should reassess your college choice and perhaps your career choice.
Open House at the New York Film Academy: The acting and film school with locations across the globe will hold an open house for prospective students. March 9, 12-2 p.m. and March 10, 12-2 p.m. and 2:30-3:30 p.m. (ages 10-17) at 100 East 17th St. 212-674-4300, nyfa.edu
Brooklyn Charter School Fair: Representatives from 50 charter schools in Brooklyn will be on-hand to answer questions. March 16 from 10 a.m.-3 p.m. at Achievement First Endeavor Charter School, 510 Waverly Ave., Clinton Hill.
NYC Public Schools parent teacher conferences: Meet with your child’s teacher: March 12 and 13 (elementary), March 14 and 15 (high school) and March 18 and 19 (District 75). Call your school to confirm dates and times.
Open House at the Zicklin School of Business at Baruch College: Hear presentations and speak with professors and administrators about the MBA and MS programs. Registration required: tinyurl.com/bm7ezun, March 4 from 6-745 p.m. at the Baruch Library, 151 E. 25th St. Info: 646.312.1300
Open House for the Zincklin School of Business Executive Program at Baruch College: Learn about Zicklin's Executive Master in Business Administration (EMBA), Executive Master of Science in Finance (EMSF) and the Executive Master of Science in Financial Statement Analysis (EMS-FSA). Registration required: blsciblogs.baruch.cuny.edu/execmba/. March 5 from 6-7:30 p.m. at the Baruch Library, 151 E. 25th St. Info: 646-312-1300
Information session for CUNY’s Baccalaureate for Unique and Interdisciplinary Studies: This program is for self-directed, highly motivated students who want to design their own majors. March 6 from 5:30-6:45 p.m. at the Graduate Center, 365 Fifth Avenue. Info: 212-817-8220
Information session for Baruch College’s School of Public Affairs graduate program: The Director of Student Affairs and Graduate Admissions will answer questions about admissions and the application process. Registration required: events.embark.com/event/baruch/spa. March 6 from 6-7:30 p.m. at the Baruch College Administrative Building, 135 East 22nd St. Info: 646-660-6750
Information session for the CUNY School of Professional Studies/ The Murphy Institute's MA in Urban Studies: Learn more about the new MA in urban studies program. Registration required: sps.cuny.edu/urbaninfo. March 6 from 6-8 p.m. at 25 W. 43rd St.